. Soundex Manufacturing Company manufactures one product, with a standard cost
detailed as follows:
Direct materials, 20 meters at $.90 per meter $18
Direct labor, 4 hours at $6 per hour 24
Factory overhead applied at five-sixths of direct labor
(Variable costs = $15; Fixed costs = $5) 20
Variable selling and administrative 12
Fixed selling and administrative 7
Total unit costs $81
Standards have been computed based on a master budget activity level of 2,400 direct
labor-hours per month.
Actual activity for the past month was as follows:
Material purchased 18,000 meters at $.92 per meter
Materials used 9,500 meters
Direct labor 2,100 hours at $6.10 per hour
Total factory overhead $11,100 ($8,000 is variable and $3,100 is fixed)
Production 500 units
Required:
Compute the eight variances that were discussed in class